Think Tank

Zhang Yuyan: Free trade, no questions asked

2025-09-10   

The Chinese civilization, forged over 5000 years ago, is vast and profound. Many of its ideas are highly compatible with those of other countries or civilizations, while also possessing distinct uniqueness. The open and progressive view of civilization should have been a shared vision between the East and the West. However, the deviation from some precious achievements of human civilization and common sense poses significant challenges to the world today, with a typical example being the disregard for the fundamental principle of "mutual benefit and win-win" for human survival and development. On July 9, 2025, a China Europe Express (Chengdu Chongqing) South Channel Express train loaded with 55 containers of semi-finished LCD TVs and complete sets of spare parts departed from Chengdu International Railway Port. There is a well-known concept in economics called "Pareto improvement". Its meaning is that in a society or group, at least one person's welfare is improved, while no one's welfare is harmed, and this society has achieved welfare improvement. When there is no room for further welfare improvement, meaning that the welfare improvement of some individuals must be conditional on the welfare of at least one other person being compromised, the society achieves Pareto efficiency. Due to the benefits for some and no losses for others, "Pareto improvement" has become a highly desirable goal in economics, and the ability to achieve "Pareto efficiency" has become the main criterion for evaluating the quality of policies or regulations. It is obvious that achieving 'Pareto improvement' is a good outcome, exhausting all possibilities of 'Pareto improvement' and ultimately achieving 'Pareto efficiency'. But from the perspective of Confucianism, these are not good enough. Confucius said, "If you want to establish yourself, then establish others; if you want to achieve success, then become a great person." He believed that it was not enough to achieve development and improvement on your own, but rather to develop and improve together with others. In other words, a person's "establishment" and "attainment" are based on the premise of others' "establishment" and "attainment". Compared to the concept of "Pareto improvement", Chinese scholar Mr. Zhao Tingyang created a concept called "Confucian improvement" (also known as "Confucian improvement"). Compared with the Pareto improvement, the Confucian improvement has taken another level, as this concept emphasizes that one's own development must be linked to the common development and progress of others. As a further extension, 'Confucian efficiency' can be defined as the state achieved by a society when all possibilities for 'Confucian improvement' have been exhausted. There are various ways to achieve Pareto improvement and Confucian improvement, among which one of the most direct ways is free trade. In The Wealth of Nations, the renowned British economist and "father of modern economics" Adam Smith elaborated in detail on the division of labor and exchange based on the productivity of different products, as well as the enormous "gain from trade" that this division of labor and exchange brings. Later, British classical economist David Ricardo further enriched Smith's ideas and laid a solid foundation for trade theory. Although China has pursued a policy of isolationism and self isolation during certain periods in history, overall, the concept and practice of free trade have a long tradition and dominate in China. During the Western Han Dynasty, two important documents emerged in China: the "Huainanzi" written by Liu An and others, and the "Records of the Grand Historian" written by Sima Qian. In both documents, the authors realize that the division of labor, production, and exchange between individuals or countries can benefit all parties involved. In their eyes, the way of making money or economic growth, also known as "commodity cultivation", lies in "exchanging what I have for what I don't have", "exchanging what I have for what I don't have", "exchanging what I have for what I lack, exchanging what I am rich in for what I lack, exchanging what I am good at producing for what I am not good at producing" in modern Chinese. The result is mutual benefit and win-win, where everyone gets what they want and is happy. Given that the ideas of Liu An and Sima Qian are so close to the trade theories of Smith and Ricardo, the clear free trade ideas of ancient China can be summarized as the "Liu An Sima Qian theorem". On April 3, 2023, envoys and diplomats from 17 countries to China visited the Beibu Gulf Port Smart Port Innovation Center in Guangxi Province, and deeply felt the speed of China's development and the vitality of the "the Belt and Road" initiative. Photo by Chen Qiuxia, China News Service reporter. For countries, groups, and even individuals, openness brings progress, while isolation inevitably leads to backwardness, which has been proven in the history of human civilization. As an integral part of Chinese civilization, the "Confucius Improvement" and "Liu An Sima Qian Theorem", combined with the theory of division of labor and trade as one of the main branches of Western classical economics, represent an open and progressive view of civilization and have made tremendous contributions to the development and prosperity of humanity. In today's world, some countries are repeating the mistakes that humanity has made, repeating the mistakes of trade protectionism, revering zero sum game thinking, bullying and domineering, beggar thy neighbor, benefiting oneself at the expense of others, and even harming oneself, ignoring the open world economy and putting human harmony and progress in danger. On November 7, 2024, in the exhibition area of the 7th China International Import Expo in Shanghai, a Saudi handmade carpet booth attracted visitors. Facing two distinct and opposing views on civilization history and behavioral logic, China's choice is clear and firm: to use incremental, partial, and continuous "Pareto improvements", especially the "Confucius improvement", through an equal and orderly world multipolarization and inclusive economic globalization, gradually approaching the "Pareto efficiency" and even the "Confucius efficiency", and ultimately achieving the goal of building a community with a shared future for mankind. I believe that this is also the common vision of the vast majority of countries and peoples. Author Introduction: Zhang Yuyan is a member of the Chinese Academy of Social Sciences and a professor at the University of Chinese Academy of Social Sciences. She has long been engaged in research on institutional economics and international political economy, and has published works such as "Economic Development and Institutional Choice," "International Economic and Political Science," "The Roots of American Behavior," and "China's Path to Peaceful Development.

Edit:Luo yu Responsible editor:Jia jia

Source:CNS.cn

Special statement: if the pictures and texts reproduced or quoted on this site infringe your legitimate rights and interests, please contact this site, and this site will correct and delete them in time. For copyright issues and website cooperation, please contact through outlook new era email:lwxsd@liaowanghn.com

Recommended Reading Change it

Links